Prices of luxury homes in Dubai increased 41 per cent in the fourth quarter of 2021, compared with the previous quarter, with the average property price reaching Dh4.6 million ($1.25m), as sales surged amid a continued economic recovery from the pandemic-induced slowdown.
The emirate's prime residential market recorded a 5.27 per cent increase in the number of home sales, with deals valued at Dh17.07 billion, according to analysis by Luxhabitat Sotheby’s based on data from the Dubai Land Department.
A total of 5,205 apartments and 552 villas were sold during the quarter.
The most expensive property sold was a mansion in Jumeirah Bay Island that went for Dh121m, said Luxhabitat Sotheby's, which handled the transaction.
The top three areas with the highest volumes of luxury home sales were Palm Jumeirah with Dh3.4bn, Downtown Dubai at Dh3.2bn and Business Bay at Dh2.5bn, the report said.
In the prime residential market, Al Barari area recorded the highest growth in sales to Dh373m in Q4 2021, up from Dh122m in Q3, owing to new launches. This was followed by Jumeirah, where sales grew from Dh122m to Dh372m, and Arabian Ranches 1, where sales rose from Dh176m to Dh452m during the same period.
Dubai’s luxury property market recorded the third highest price growth among global cities last year, consultancy Savills said earlier this month, with prime residential centres set to be a safe haven for investment in 2022.
The city’s real estate market is expected to achieve capital growth of 4 per cent to 5.9 per cent this year, after growing 17.4 per cent in 2021, according to Savills World Cities Prime Residential Index, as the economy recovers from the Covid-19 pandemic and demand outstrips supply.
Luxhabitat Sotheby's said it handled more than three per cent of the total sales within Dubai’s overall residential market of Dh300bn, which amounts to more than Dh9bn in sales in 2021. The company said its revenue grew eight-fold last year from 2020.
Dubai's prime villa market, meanwhile, recorded a contraction of 33.78 per cent as there was a surge in demand for apartments. The last quarter produced Dh4.1bn in sales, with an average price of Dh10.6m for a villa.
There has also been an increase in the price per square foot by 21 per cent – indicating an added interest in quality villas, Luxhabitat Sotheby's said.
The number of top-end apartments sold increased 35 per cent to Dh11.1bn in the period. The average prime apartment now costs about Dh2.4m, with average price per square feet at Dh1,652.
The company expects 2022 to be the best year yet for Dubai’s luxury property market.
"We are still short in stock of premium and luxury properties, specifically larger apartments, penthouses and luxury beachfront or golf course-view villas," Honey Deylami, associate director at Luxhabitat Sotheby's, said.
"I expect a strong market in 2022, especially in the luxury market segment, as we still see a strong demand in those areas and not enough supply.”
Dubai’s top five residential areas by sales volume
1. Palm Jumeirah – Dh3.47 billion
2. Downtown Dubai – Dh3.29bn
3. Business Bay – Dh2.57bn
4. Mohammed bin Rashid City – Dh1.75bn
5. Dubai Marina – Dh1.27bn